Up, up and away: Thomson owner TUI Travel completes £5.6bn merger with German parent to create world's largest tour operator

Thomson holidays firm TUI Travel has completed a merger with its German parent company, TUI AG today to create the world's largest tour operator.

The deal has formed a business with over 300 hotels, 136 aircrafts and 1,800 shops across Europe selling holidays to 30 million customers in hundreds of countries.

Shares in the newly created company, which has taken the TUI Group name began trading on the London Stock Exchange today at 1,085p, giving the firm an initial value of £5.6billion.

Tied the knot: Tui Travel has completed a merger with its German parent company today to create the world's largest tour operator

Shares in TUI Travel were trading at 437.6p each before being suspended last week pending completion of the merger. TUI Travel shareholders received 0.399 new TUI AG shares of each old stock held, meaning the new share price is pretty close to that of the old one.

Peter Long, chief executive of TUI Travel and joint chief executive of the merged group, said it was a 'fantastic day' for the firm. He added: 'Personally, I am very excited about what the future holds and the opportunities that lie ahead for us as TUI Group'.

Dr Klaus Mangold, chairman of the supervisory board of TUI Group, said: 'TUI and TUI Travel are now one company - with this, we will combine the best of both organisations to deliver growth.'

TUI Travel shareholders will have a 46 per cent stake in the combined group, while the deal also received the backing of Russian billionaire Alexey Mordashov, who was TUI AG's largest shareholder with a 25 per cent stake.

The merger has been in the pipeline since 2007 and a deal was attempted last year, but it collapsed then over disagreements about price.

Peter Long will replace Dr Mangold as chairman of TUI Group's supervisory board in February 2016, leaving Friedrich Joussen as sole chief executive.

Mr Joussen said: 'Under the roof of the new TUI Group we want to grow and increase our international market position'.

Moving on up: Peter Long will move to become chairman of TUI's supervisory board in February 2016

Earlier this month, TUI Travel reported a doubling of annual profits in its final set of results before the merger was completed.

The FTSE 100 firm's full-year pretax profits rose from £169million to £362million, although revenues slipped 3 per cent to £4.6billion. Its dividend rose to 24.55p a share, from 13.5p.

Shore Capital analyst Greg Johnson said the enlarged business was now in a position to raise cash by selling non-core parts of the firm such as container shipping and accommodation services.

He added: 'We see significant scope for strong earnings growth over the medium-to-long term reflecting the continued growth in the core TUI Travel, delivery of new cruise ships, improving hotel occupancy, new hotel resorts and refinancing the balance sheet'.

Despite struggling with their operations in Russia and Ukraine,TUI Travel achieved success in other divisions including a halving of its French tour operator's losses in a bid to break even in the country by 2016, while the UK, Germany and the Netherlands performed strongly.

The group said that an increasing drive towards online sales, and its all inclusive holiday packages remained popular.